Category: Stock Market

The Beach Energy Ltd (ASX: BPT) share price managed to outrun benchmarks in April and climbed more than 4% into the green. At the time of writing, it is trading at $1.65 apiece, down 4% on the day.

While April was a fairly quiet month for Beach, strong market fundamentals have boosted revenue and earnings for the exploration and production company.

Meanwhile, the benchmark S&P/ASX 200 Index (ASX: XJO) clipped a loss of around 1% over the same timeframe.

Oil markets soar in April

Last month was hallmarked by the release of Beach Energy’s Q3 results and FY22 expenditure guidance update.

During the quarter, Beach recognised sales revenue of $458 million, symbolising a 15% gain on the previous quarter.

However, while revenues stretched up, production narrowed by 3% to 5.2 MMboe, compounded by a 5% reduction in sales volume.

Consequently, it was the anabolic-like growth of both oil and natural gas markets in 2022 that transposed to higher income for Beach, it notes. The company reported a realised oil price of $176.5 per barrel and a realised gas/ethane price of $8.4/GJ, up 51% and 10% respectively.

Pricing strengths continued to run throughout April. Brent Crude oil finished $1 per barrel higher at approximately US$108 per barrel while natural gas futures are each resting at multi-decade highs in US, UK, and European contracts.

Helping ‘fuel’ the rally, the Russian-Ukrainian conflict has ensured that geopolitical risks continue to plague energy markets. Oil prices surged another 5% this week after the European Union put forward a plan to ban Russian crude oil imports.

In fact, Beach Energy wasn’t the only winner last month. Energy markets around the world are rocketing. The Betashares Global Energy Companies ETF (ASX: FUEL) also landed around 5% in the green last month, for instance, despite some end-of-month volatility.

Beach Energy share price snapshot

In the last 12 months, the Beach Energy share price has shot up by 30% and is now trading back above its pre-pandemic highs.

This year to date, shares have surged 31% and are in the green across all major time frames.

The post Why did the Beach Energy share price beat the ASX 200 in April? appeared first on The Motley Fool Australia.

More reading

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• Why are ASX 200 energy shares leaping higher today?
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• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

As investors sell off stocks broadly, the “risk-off” trade has made its way to cryptocurrencies. The market has been down sharply since just before the trading opened Thursday, and that’s when a sudden crash hit crypto. 

As of 3:30 p.m. ET, the value of Dogecoin (CRYPTO: DOGE) had fallen 5.4% over the prior 24 hours, Ethereum (CRYPTO: ETH) was down 7.8%, and The Sandbox (CRYPTO: SAND) was down 11.8%. Ironically, early Thursday morning, values were up by nearly 10% from their Wednesday lows. 

So what 

Amid the backdrop of a falling crypto market, the news related to the industry is fairly positive. Congress is considering allowing companies to include cryptocurrencies in their 401(k) plans, which could bring a new swath of investors to the assets. California also announced that it will also look into regulations to adopt digital assets — not fight against them — as an executive order from President Joe Biden indicated recently.

Gucci also announced that it will begin accepting certain cryptocurrencies in its stores as early as this month, Bitcoin, Ethereum, and Dogecoin among them.

Despite those positive news items, the falling stock market is pulling cryptocurrency values down with it. In addition, the volatility of tokens means the stock market’s losses are generally magnified in crypto, at least in the short term. 

Now what 

The volatility we are seeing Thursday is par for the course in cryptocurrencies. Investors need to expect that valuations will swing wildly, even if news seems to be moving in their favor. What’s really changed in the last six months is that crypto values have become much more correlated with the stock market overall. 

Taking a step back, I do see some positive news for the crypto industry. Retailers accepting cryptocurrencies is a positive step toward broader adoption, and a flood of developers are moving into the space as well. That’s great for the development of the crypto economy, but it’ll take time for developers to build new projects and for user adoption to grow. 

I’m bullish on the development in the crypto space, as well as what appear to be favorable trends in the regulatory environment, at least in the U.S. These should be tailwinds for the crypto market overall. But it will be a while before those things have any direct impact, and clearly, traders’ time horizons are getting shorter by the day. 

Big market sell-offs can be great buying opportunities for long-term investors, though it can be difficult to take advantage of them. I plan to buy crypto assets in the coming months in anticipation of their growth over the next decade, but that doesn’t mean I think values will recover quickly. It may take months or even years for even the best cryptocurrencies to get back to their previous highs. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Ethereum, Dogecoin, and The Sandbox dropped today appeared first on The Motley Fool Australia.

More reading

• Why The Sandbox Cryptocurrency Is Up Today
• Here’s how the Ethereum price stacked up in April
• Can cryptocurrency bounce back in May?
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• Why Bitcoin, Ethereum, and Coinbase Jumped Today

Travis Hoium has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Insurance Australia Group Ltd (ASX: IAG) shares are currently trading with a 4.13% dividend yield and that can mean more than extra pocket change for willing investors.

IAG offers its shareholders the option to participate in a dividend reinvestment plan. Let’s take a look at what that means for those who own stock in the S&P/ASX 200 Index (ASX: XJO) insurer.

At the time of writing, the IAG share price is $4.60. The company has handed out 19 cents of dividends over the last 12 months.

All the details on IAG’s dividend reinvestment plan

Own IAG shares? If so, you can up your holding in the company for free – sort of.

The company operates a dividend reinvestment plan, allowing shareholders to forego their cash dividends in return for more shares.

Any new shares handed to investors under the dividend reinvestment plan will be free of broker or transaction costs.

How many shares per dividend that participating shareholders will receive will vary. That variation is based on a few factors – mainly, the value of a particular dividend and the trading price of IAG shares.

The company will decide what each share handed out under the dividend reinvestment plan is worth based on the average market price of IAG shares over at least 5 trading days.

For instance, IAG’s most recent dividend was worth 6 cents. Meanwhile, the company’s directors determined the dividend reinvestment plan’s price to be approximately $4.84.

So, an investor participating in the plan with a holding of roughly 80 shares would receive a single new share.

Any remaining value – that is, a portion of a payout that doesn’t make up the value of full share – is then carried forward to the next dividend payout.

IAG investors can also choose to commit only a portion of their shares to the plan, thus receiving both a cash dividend and additional shares.

Sadly for some, only shareholders who live in Australia or New Zealand can participate in the plan. Though, the company notes there are some exceptions to that rule.

The post Does IAG have a dividend reinvestment plan? appeared first on The Motley Fool Australia.

More reading

• What happened to the IAG share price in April?
• How does the IAG dividend compare to QBE?
• The IAG share price has lost 10% since February. Is it an opportunity?
• How did the IAG share price compare to its sector in the March quarter?
• How did the IAG share price stack up in the March quarter?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The REA Group Limited (ASX: REA) share price is under pressure on Friday amid a market selloff and the release of a softer than expected quarterly update.

In morning trade, the property listings company’s shares are down 9% to a 52-week low of $110.68.

REA share price slides on softer than expected Q3 growth

• Revenue up 23% year on year to $278 million
• EBITDA up 27% to $155 million
• Free cash flow up 39% to $91 million
• National listings growth of 11%
• 7 million unique visits per month

What happened during the third quarter?

For the three months ended 31 March, REA delivered a 23% increase in revenue. And thanks to its operating expenses growing slower than revenue at 17% to $122 million, the company’s EBITDA grew at the quicker rate of 27% to $155 million.

This means that REA’s revenue is now up 32% year to date to $869 million and its EBITDA is up 27% year to date to $523 million including acquisitions. Excluding acquisitions, the company’s revenue is up 23% and its operating EBITDA is up 25% in FY 2022.

A key driver of this growth was its Australian Residential business, which delivered strong quarterly revenue growth thanks to higher buy listings, price rises, increased depth and Premiere penetration, and continued growth in add-on products.

The release also highlights that the flagship realestate.com.au delivered a record average monthly audience for the quarter. The website grew to be Australia’s sixth largest online brand during the quarter, with 12.7 million people visiting each month on average. This represents 63% of Australia’s adult population.

What about the rest of its operations?

Rental revenue also continued to benefit from increased depth penetration and a price rise, though this was more than offset by a decline in rental listings.

REA’s Commercial and Developer revenue was broadly flat. This reflects weaker Developer revenues due to a continued decline in project commencements, which offset improved Commercial revenue from higher depth volumes and price rises.

Finally, the company’s Media, Data & Other revenues increased for the quarter, REA India delivered strong revenue growth, and its Financial Services business delivered strong growth in operating revenue. The latter was due to continued growth in settlements and brokers and the acquisition of Mortgage Choice.

How does this compare to expectations?

As you might have guessed from the REA share price performance today, this quarterly update was softer than the market was expecting.

A note out of Goldman Sachs states: “REA delivered a 3Q22 update that was below expectations, with Sales/EBITDA +23%/+27% vs. pcp and -7%/-6% vs. GSe.”

Management commentary

REA Group Chief Executive Officer, Owen Wilson, was pleased with the quarter. He commented:

“Australians transacted property at pace during the quarter as continued high demand gave sellers the confidence to bring their properties to market. These conditions, combined with record take up of our premium products, contributed to our very strong result. We also continued to see excellent growth in our strategically important Financial Services, Data and Indian businesses.”

Outlook

REA has had a difficult start to the fourth quarter due to the timing of Easter. It explained that national listings were down 8% in April due to a 19% decline in Sydney and an 18% decline in Melbourne.

And with the federal election happening in the coming weeks, REA expects listing volumes to be lower for the quarter.

Nevertheless, the fourth quarter volume headwinds are expected to be more than offset by higher Residential and Commercial yields, supported by contracted price rises and increased depth penetration, the benefit of strong March volumes deferred into Q4, and growth in Data and REA India revenues.

Mr Wilson concluded:

“The Australian property market is very healthy. While we are seeing housing price moderation in some areas, the strong economic fundamentals will continue to support robust conditions beyond this quarter. We are excited by the significant growth opportunities throughout our business and are well positioned to deliver another strong full year result.”

The post REA share price sinks 9% to 52-week low following Q3 update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There’s no doubt electric cars and batteries are the way of the future, but has the investor fervour gone too far?

Going backwards from the finished product, ASX shares of miners that dig up lithium and other minerals that contribute towards batteries have been all the rage in recent months.

For example, while the broader S&P/ASX 200 Index (ASX: XJO) has lost almost 3% this year, the Allkem Ltd (ASX: AKE) share price has risen almost 11%.

In fact, lucky Allkem shareholders have enjoyed returns of 78% over the past 12 months, and a remarkable 279% over the past 5 years.

Just on Thursday this week, ASX shares of lithium producers surged.

However, one expert has warned investors to be careful not to get burnt flying so close to the sun.

‘Material chance of disappointing’

In a memo to clients, QVG Capital analysts said that battery minerals have really become an area of “market speculation”.

But ultimate winners will be few and far between.

“There is no shortage of these names on the ASX, however, few are likely to have commercial operations,” the memo read.

“Unproven mining methods, chemical processes and or spicy jurisdictions that have never produced lithium before all loom as potential headwinds for these projects.”

The team warned that much “optimism” has been published about exploratory projects that “have a material chance of disappointing”. 

“Selectively and within risk tolerances, we have taken a short position in some of these names which worked in April.”

And even if all those exploratory projects worked out, that would provide an oversupply and bring mineral prices down.

That’s typical of the materials sector, which is notoriously cyclical.

Investing for the long run

The team at QVG, much like at The Motley Fool, try to find investments that will perform in the long run — that is, over the entire economic cycle.

“Over a long enough time horizon, we are likely to experience the full spectrum of economic environments,” the memo read.

“Similarly, over a long enough time horizon, highly durable growth companies will be worth multiples of the low return, cyclically-driven companies we seek to avoid.”

The QVG long-short fund’s current 5 biggest holdings reflects this philosophy:

1. Uniti Group Ltd (ASX: UWL)
2. Johns Lyng Group Ltd (ASX: JLG)
3. Hansen Technologies Limited (ASX: HSN)
4. Aristocrat Leisure Limited (ASX: ALL)
5. CSL Limited (ASX: CSL)

The post Expert warns investors about lithium and battery mineral ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and Hansen Technologies. The Motley Fool Australia has recommended Uniti Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has been struggling this week.

This comes amid the company releasing its half-year results to the ASX on Wednesday.

On Thursday, ANZ shares closed 1.72% lower at $26.91 apiece. In early trading today, they are down another 0.97% at $26.65. They have now fallen 2.4% since last Friday’s close.

ANZ shares set to go ex-dividend

While the company hasn’t released any other price-sensitive news, investors are selling off ANZ shares.

This is regardless of the company’s shares being set to trade ex-dividend on Monday.

The S&P/ASX 200 Index (ASX: XJO) is also down this week. It’s fallen around 3% since last Friday’s close, including a 2% fall already this morning.

Investors are jittery after heavy falls were recorded on Wall Street last night. Clearly, fears over rampant inflation and the risk of a recession is putting global markets under selling pressure.

Nonetheless, investors need to buy ANZ shares before market close today to be eligible for the interim dividend.

It’s worth noting though that historically when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

When will ANZ shareholders be paid?

For those who are eligible for the ANZ dividend, shareholders will receive a dividend payment of 72 cents per share on 1 July. This represents a growth of 2% when compared to the previous corresponding dividend of 70 cents per share.

It’s also worth noting that this is the biggest interim dividend that will be paid by the company since COVID-19.

The dividend is fully franked which means shareholders can expect to receive tax credits from this.

ANZ share price summary

Over the last 12 months, the ANZ share price has fallen by 3.3%. It is also down 2.8% year to date.

The company’s shares reached a 52-week low of $24.65 in March, before accelerating to 2021 levels.

ANZ commands a market capitalisation of roughly $75.89 billion and has a trailing dividend yield of 5.28%.

The post Hoping to secure the next ANZ dividend? Here’s what you need to do appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Why ANZ, ARB, Janus Henderson, and Temple & Webster shares are falling
• ANZ shares downgraded after cost cutting plan abandoned
• 5 things to watch on the ASX 200 on Thursday
• Everything you need to know about the latest ANZ dividend

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

Shares of Amazon.com (NASDAQ: AMZN) fell 7.5% on Thursday, furthering the recent plunge in the e-commerce-titan’s stock price. 

So what 

E-commerce companies are struggling. That’s the upshot of a slew of recent earnings reports from online retailers and marketplaces.

E-commerce businesses are facing a host of challenges right now. Inflation — including sharply higher food, energy, and housing costs — is taking a toll on the U.S. consumer. Shoppers in many other countries aren’t faring much better, and that’s forcing consumers around the world to pull back on their spending. And when they do shop, many people are doing their buying inside traditional retail stores, now that coronavirus-related restrictions in many areas have been lifted.

Add it all up, and we get a day like today. Leading e-commerce companies Shopify, Etsy, and Wayfair saw their stocks plunge by roughly 15%, 17%, and 26%, respectively. And industry leader Amazon.com sank along with them.

Now What

Was the steep decline in Amazon’s stock price warranted? 

It’s true that, like its competitors, Amazon’s online retail growth is slowing. However, unlike its rivals, e-commerce is not Amazon’s primary profit generator. Cloud computing is where it makes the bulk of its profits — and that business is performing exceptionally well.

Amazon Web Services (AWS) saw its revenue surge 37% to $18.4 billion in the first quarter, while its operating income soared an even more impressive 57%, to $6.5 billion. With countless businesses set to migrate their operations to the cloud in the coming decade, AWS should remain a powerful source of profit growth for many years to come.

Investors appear to be focusing too much on Amazon’s near-term e-commerce challenges and overlooking its massive expansion opportunity in cloud services. Today’s sell-off, in turn, was likely overdone. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Amazon stock tanked today appeared first on The Motley Fool Australia.

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Joe Tenebruso has the following options: long January 2024 $2,000 calls on Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Etsy, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Australia is waking up to a grim scene after US stock markets tumbled overnight.

New York’s benchmark index, the S&P 500 Index (SP: .INX), plunged 3.56%, cancelling out Wednesday’s euphoric gain.

The tech-heavy Nasdaq Composite (NASDAQ: .IXIC) was hit harder still. As most of Australia snored, it plummeted 4.99% in its worst session since June 2020. It’s now at its lowest level since 2020.

The Dow Jones Industrial Average Index (DJX: .DJI) also suffered in Thursday’s session overseas. It gave up more than 1,000 points, or 3.12%.

The US stock market’s downturn could spell bad news for the S&P/ASX 200 Index (ASX: XJO) on Friday, particularly ASX 200 tech stocks, which often react to the Nasdaq’s movements.

Here’s what might have dinted the US stock market overnight.

US stock markets flop in Thursday’s session

US stocks struggled overnight, with the nation’s markets giving up Wednesday’s notable gains.

The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average launched 2.9%, 3.2%, and 2.8% respectively on Wednesday, likely driven by positive sentiment out of the United States Federal Reserve.

The Federal Open Market Committee decided to increase interest rates by 0.5% to between 0.75% and 1% on Wednesday – its biggest increase in 22 years – in an effort to tackle inflation.

However, Federal Reserve chair Jerome Powell also commented that the entity wasn’t “actively considering” hiking interest rates by another 0.75%.

Powell’s confidence appeared to quell the market’s nerves on Wednesday. However, concerns apparently reared their head once more in yesterday’s (Aussie time) session.

Some US stock market favourites dragged on the NASDAQ-100 (NASDAQ: NDX) overnight.

The index slumped 5% driven by the likes of Airbnb Inc (NASDAQ: ABNB) and Tesla Inc (NASDAQ: TSLA). The stocks were among the Nasdaq-100’s worst performers, both slumping 8%.

Meanwhile, the share price of eBay Inc (NASDAQ: EBAY) tumbled 11% on the back of the company’s quarterly results.  

Booking Holdings Inc (NASDAQ: BKNG) was one of only a few Nasdaq-100 stocks closing in the green on Thursday. It gained 3% on news demand for travel surged during the March quarter.

The post The US stock market just took a major dive. What’s going on? appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock dropped this morning
• Why Tesla stock popped on Tuesday
• Why Tesla stock dropped, then popped on Monday
• Elon Musk just sold $5.6 billion of Tesla shares. What’s the deal?
• Why Tesla stock is bouncing back today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Inc., Booking Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended eBay. The Motley Fool Australia has recommended Booking Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Looking for dividend shares for you income portfolio? If you are, you may want to check out the two listed below that have been rated as buys by the team at Goldman Sachs.

Here’s what you need to know about these ASX 200 dividend shares:

Harvey Norman Holdings Limited (ASX: HVN)

The first ASX 200 dividend share that Goldman Sachs is a fan of is retail giant Harvey Norman.

Goldman likes Harvey Norman due to its belief that it “has a greater preference within the boomer generation and a higher exposure to regional Australia.” Its analysts believe this shields the company from online disruption.

In addition, the broker is forecasting some very big dividend yields. It expects fully franked yields of 8.9% in FY 2022 and 8.2% in FY 2023.

In addition, Goldman sees plenty of value in the current Harvey Norman share price. It has put a buy rating and $5.80 price target on its shares.

National Australia Bank Ltd (ASX: NAB)

Another ASX 200 dividend share that Goldman Sachs is a fan of is banking giant NAB.

In fact, the broker believes it is the best option for investors in the sector right now. This is due partly to NAB’s balance sheet mix, which Goldman feels provides the best exposure to the domestic system growth. It also highlights that NAB’s franchise is performing strongly, growing at or above system growth in most segments.

The broker is also expecting the bank’s shares to provide income investors with attractive yields in the coming years. Its analysts expect yields of 4.7% in FY 2022, 5.1% in FY 2023, and 5.3% in FY 2024.

Goldman has a conviction buy rating and $34.17 price target on the bank’s shares.

The post Broker names 2 excellent ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 midday update: NAB disappoints, Qantas announces acquisition
• Here’s all what you need to know about the latest NAB dividend
• NAB share price tumbles on earnings miss and costs outlook
• NAB share price on watch amid $3,480 million half-year cash profit

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Goodman Group (ASX: GMG) share price has fallen by around 20% since the start of 2022.

Goodman is a large, integrated industrial property owner, manager and developer. However, being large hasn’t made it impervious to the volatility and declines that the ASX share market has seen in the last few months.

How has the business been performing recently?

The first six months of FY22 saw the business report a large increase in operating profit and it has benefited from valuation gains.

Goodman reported that operating profit rose 28% to $786.2 million. Statutory profit was $2 billion, which included items like valuation gains, non-cash items and derivative and mark to market movements.

The revaluation gains across the group and partnerships amounted to $6 billion.

Total assets under management (AUM) increased 32% to $68.2 billion, reflecting development completions and higher valuations. The business said that AUM growth is expected to continue in future years, sustained by revaluations and continuing development activity.

Goodman Group also said that it had $12.7 billion of work in progress (WIP), with 63% pre-committed and completed projects averaging 99% leased, reflecting the “strong” customer demand for the group’s sites. The development yield on cost is 6.7%.

The overall rental side of the business is seeing “high” numbers. Portfolio occupancy was 98.4% and the like-for-like net property income (NPI) growth was 3.4%.

Industrial property is delivering

The Goodman CEO Greg Goodman said:

Our strategy to provide essential infrastructure for the digital economy is delivering. The business is performing strongly across all segments, including our development projects, leasing success, rental growth, significant valuation uplift and the strong performance of our partnerships.

In addition, COVID related disruptions in FY22 have been managed to have less impact on the full year projections than we had initially assumed. The operating outlook for the business is strong and gives us confidence for the remainder of this year.

Due to the performance of the business, Goodman upgraded its market guidance for FY22, with operating earnings per security (EPS) growth projected to be 20%.

It’s expecting to pay a distribution of 30 cents per security, due to the “attractive opportunity to deploy retained earnings into the group’s development and investment inventory.”

Is the Goodman share price a buy?

Different brokers have different opinions on the business. For example, Morgan Stanley currently rates Goodman as a buy with a price target of $27.88 – that implies a potential rise of almost 30%. The broker likes the business because of the potential growth, and industry it operates in.

However, one of the brokers that is a little less enthusiastic on the company is Ord Minnett, which currently rates the business as a hold, with a price target of $25. The Goodman share price has fallen since that rating which was based on the elevated share price at the time.

Another broker that is positive on Goodman is Citi, which thinks that industrial property prices can keep rising because of all the tenants that now want logistics facilities for e-commerce and supply chain purposes.

The post Is the Goodman share price a big opportunity? appeared first on The Motley Fool Australia.

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• Analysts name 2 of the best blue chip ASX 200 shares to buy now
• 2 highly rated ASX 200 shares analysts are tipping as buys

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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